Why people want BoE rate to rise?

purch

If i were in charge they'd be 1.5% by the year end and 3.5% by year end 2010

Luckily for all of us, that you are not in charge.

That is unless you want to see 25% unemployment, and a recession so deep we might never get out of it !!! :eek:

I would like there to be an economy left, so my children might stand a chance of getting a job when they are old enough !!!

kennyboy66_2

Cannon_Fodder wrote: »

Its not good for the economy as a whole to have an imbalance like this.

Higher rates would encourage more saving, which would be good in the long-term.

But, the household savings rate at the moment is 5.6% (Q2 2009) and the highest it has been since 2003 and higher than most times during the last 10 years.

Increased interest rates at the moment would have little impact on the household savings rate - it will increase anyway through fear.

Thrugelmir

Really2 wrote: »

If you overpay yes, as you hedge your rate.

For some maybe. But for most significant overpayments aren't a priority.

Really2

mitchaa wrote: »

If i were in charge they'd be 1.5% by the year end and 3.5% by year end 2010.

You missed off because you have sold you house now.:rolleyes:

Really2

Thrugelmir wrote: »

For some maybe. But for most significant overpayments aren't a priority.

Also trackers usually have no redemption penalty. So it is good for being highly mobile in terms of reacting to the market.

So if they are good now you can still adjust in the future without penalty.

was it £8bn overpaid last quarter, I would say that would mainly be people on trackers, would you?

Thrugelmir

kennyboy66 wrote: »

But, the household savings rate at the moment is 5.6% (Q2 2009) and the highest it has been since 2003 and higher than most times during the last 10 years.

Increased interest rates at the moment would have little impact on the household savings rate - it will increase anyway through fear.

To rebuild wealth through savings will take a long time. In 2007 the savings rate was the lowest since 1960.

The rate of 5.6% will be heavily skewed towards the higher paid.

Thrugelmir

Really2 wrote: »

Also trackers usually have no redemption penalty. So it is good for being highly mobile in terms of reacting to the market.

So if they are good now you can still adjust in the future without penalty.

was it £8bn overpaid last quarter, I would say that would mainly be people on trackers, would you?

Maybe not.

Although the base rate has been at its all-time low of 0.5 per cent for over six months now, new research suggests that some tracker mortgage borrowers are not taking the chance to make overpayments .

According to Unbiased.co.uk, 53 per cent are not paying off more now to reduce the size and term of their debt, despite there currently being prime opportunity to do so with such low rates .

Only one in five has kept their repayments at the same level as before the recession, the figures state.

The report also showed that some are using the money they could be saving on their mortgage to treat themselves, while others are paying off different debts .

http://www.mortgages.co.uk/news/2009/Sep/tracker-mortgage-customers-fail-to-overpay.html

inspector_monkfish

mitchaa wrote: »

If i were in charge they'd be 1.5% by the year end and 3.5% by year end 2010.

you and that bl00dy crystal ball
i'm gonna come upto aberdeen and smash it into a thousand pieces !!

IveSeenTheLight

Cannon_Fodder wrote: »

Pensioners are having to eat into their small amounts of capital now that interest returns have been limited.
With low rates, deliberately to discourage saving in order to stimulate consumption, what happens when the savings run out...?

What would happen to the capital if they don't utilise it and their time comes to an end?
I'm more believing in ski'ing when I retire (Spend Kids Inheritance) rather than passing it on.
I earnt it, I should utilise it.

Pensioners earnt their savings, they should utilise it as they wish

If you really have concern for pensioners, it might be worth considering those with no savings, not about those that do.

IveSeenTheLight

Really2 wrote: »

You missed off because you have sold you house now.:rolleyes:

It's okay, his wife will have final say and she does not want to stay off property ownership